LALIT MOHAN MADAN vs NEW INDIA ASSURANCE CO. LTD.

IN pursuance of understanding reached between the parties, Mr. G.S. Chawla, learned Counsel for the INsurance Company handed over a cheque for Rs. 2,85,000/- to the Counsel for complainant on 23.12.1997. The complainant, however, contended that the amount paid was agreed to as far back as 15.10.1996 in the hope that the payment would be made almost immediately. The payment had been delayed on one pretext or the other and the complainant is clearly entitled to payment of interest and suitable compensation. This prayer has been opposed by Mr. Chawla and it is this limited question which is being dealt herein.

IT will be sufficient to give the broad facts which are relevant for disposal of the limited question stated above. The complainant purchased Maruti Esteem car bearing Registration No. DL2C G7149 manufactured in the year 1995 and the Registration was transferred in his name on 3.7.1996. The complainant obtained a comprehensive insurance policy for Rs. 3,20,000/- from the opposite party. The car met with an accident on 24.8.1996 resulting in injuries to the occupants and extensive damage to the car. The Insurance Company was informed on 26.8.1996. Mr. Jeeven Aggarwal, Surveyor inspected the vehicle. As a result of discussions an offer was made to the complainant to accept Rs. 2,35,000 / - in full and final settlement of the claim on total loss basis and the complainant gave his consent vide letter dated 15.10.1996. The complainant sent the Original Registration Certificate, Driving Licence and acceptance letter regarding the amount agreed to between the parties. Thereafter the Insurance Company wrote to the complainant seeking certain clarifications and asking him to comply with certain other formalities from time to time. The case of the complainant is that he complied with the formalities without any delay but failed to receive the settled amount. Ultimately he caused Legal Notice dated 3.3.1997 to be issued to the Insuiance Company in reply dated 13.3.1997 the complainant was informed that his claim was under active process. The Insurance Company again informed the complainant vide letter dated 11.4.1997 that the claim had been approved for Rs. 2,85,000/- and that Original Registration Certificate was to be transferred in favour of the Company, original keys in duplicate to be surrendered and salvage deposited. The Insurance Company issued Salvage Collection Memo dated 21.4.1997; On 22.4.1997 the complainant contacted the godown where salvage was to be deposited to be told that they had no room to accommodate the salvage. Thereafter the complainant kept contacting the godown and ultimately requested the Branch Manager to do the needful. The Branch Manager advised the complainant to contact the Surveyor who fixed 6th of May, 1997 to deposit the salvage in the godown. The complainant arranged a crane and took the salvage to the godown only to be returned with the remarks that there was no room for receiving the salvage in the godown. The salvage was ultimately deposited. The parties have placed on record relevant correspondence exchanged between them. The complainant has also filed his affidavit. A detailed reply on behalf of the Insurance Company is also on record. We have gone through the record and have heard learned Counsel for both the parties.

In our view, the crucial question which required to be settled was the amount of indemnification. Once that amount was settled, the other requirements to be complied with by the complainant were reduced to the level of mere formalities. It requires no big arguments to say that the complainant must have given his consent to the amount offered by the Insurance Company in the hope that he would get the amount and probably go in for a new car and thereafter put the entire episode starting from the accident behind him as a nightmare. It is altogether against the spirit of the settlement to ask for one formality to be complied with and after a long gap another formality to be complied with. The complainant got on complying with those formalities. We fail to understand and rationale behind asking for particulars of the other car and reasons why no FIR was lodged after the amount with respect to the claim had been settled by mutual agreement. The original RC had been sent by the complainant and yet a further formality was required to be complied, namely getting RC transferred in favour of the Company. One would expect the Insurance Company to prepare an exhaustive list of the formalities and get those formalities completed at a personal level so that the settled amount can be paid to the satisfaction of the parties concerned. In the facts of the present case, it cannot be disputed that even depositing the salvage became problematical and the complainant was turned away with the remarks that there was no room for receiving salvage in the godown of the Insurance Company. We hope that at an appropriate level some thought would be given so that the requirement of various formalities is not intimated from time to time in endless correspondence and the settled amount can be paid without any avoidable delay. There can be no dispute that mere settlement on paper about an agreed amount is of no help to the insured. The matter of substance is that he gets the settled amount without having to wait endlessly. In the facts and circumstances of the case, it was incumbent on the Insurance Company to have got the various formalities completed within one month which we deem reasonable to have the various formalities completed and we would, therefore, allow interest on the total amount namely Rs. 2,85,000/- @ 12% per annum with effect from 15.11.1996 till date of the cheque for Rs. 2,85,000/- handed over to the complainant on 23.12.1997. In addition to the interest, the Insurance Company shall pay Rs. 5,000/- as the complainant was obliged to file the complaint inspite of the settlement and the Insurance Company delayed getting various formalities completed with a sense of urgency and speed. The aforesaid payment shall be made within 30 days of the receipt of a copy of this order failing which the complainant would be entitled to invoke the jurisdiction of this Commission under Section 27 and also the amount would carry the interest @ 12% per annum from the date of default till actual payment. A copy of this order be conveyed to the parties. Appeal allowed. _______________